At December 1, 2023, Imalda Inc. reported the following information on its statement of financial position: Accounts receivable Allowance for doubtful accounts $154,000 4,500 (credit balance) The following transactions were completed during December 2023: December 5 Sold merchandise items for $67,000. An amount of $19,000 was received in cash and the rest on account; terms 2/10, n/60. The total cost of sales was $35,000. December 12 Collected amount due from customers for credit sales made on December 5. December 20 Collected $90,000 in cash from customers for credit sales made in November 2023. December 26 One of Imalda's customers that owed $3,000 to the company experienced financial problems and was forced to close its business in December. The full amount was considered uncollectible. Total Estimated % uncollectible The company records sales revenue net of the sales discount. If a customer pays after the discount period, the sales discount that is forfeited is recorded in a separate account (sales discounts forfeited) and closed to sales revenue at the end of the accounting period. Aging of Accounts Receivable 1-30 days past due $31,500 2% Current $42,000 1% 31-60 days past due $ 5,000 10% Over 60 days past due $6,500 30% Required: 1. Determine the balances of accounts receivable and allowance for doubtful accounts at December 31, 2023, based on the preceding information. (Hint: use T-accounts to keep track of the effects of the transactions above on these accounts.)
At December 1, 2023, Imalda Inc. reported the following information on its statement of financial position: Accounts receivable Allowance for doubtful accounts $154,000 4,500 (credit balance) The following transactions were completed during December 2023: December 5 Sold merchandise items for $67,000. An amount of $19,000 was received in cash and the rest on account; terms 2/10, n/60. The total cost of sales was $35,000. December 12 Collected amount due from customers for credit sales made on December 5. December 20 Collected $90,000 in cash from customers for credit sales made in November 2023. December 26 One of Imalda's customers that owed $3,000 to the company experienced financial problems and was forced to close its business in December. The full amount was considered uncollectible. Total Estimated % uncollectible The company records sales revenue net of the sales discount. If a customer pays after the discount period, the sales discount that is forfeited is recorded in a separate account (sales discounts forfeited) and closed to sales revenue at the end of the accounting period. Aging of Accounts Receivable 1-30 days past due $31,500 2% Current $42,000 1% 31-60 days past due $ 5,000 10% Over 60 days past due $6,500 30% Required: 1. Determine the balances of accounts receivable and allowance for doubtful accounts at December 31, 2023, based on the preceding information. (Hint: use T-accounts to keep track of the effects of the transactions above on these accounts.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Transcribed Image Text:At December 1, 2023, Imalda Inc. reported the following information on its statement of financial position:
Accounts receivable
Allowance for doubtful accounts
$154,000
4,500 (credit balance)
The following transactions were completed during December 2023:
December 5 Sold merchandise items for $67,000. An amount of $19,000 was received in cash and the rest on account; terms 2/10,
n/60. The total cost of sales was $35,000.
December 12 Collected amount due from customers for credit sales made on December 5.
December 20 Collected $90,000 in cash from customers for credit sales made in November 2023.
December 26 One of Imalda's customers that owed $3,000 to the company experienced financial problems and was forced to close its
business in December. The full amount was considered uncollectible.
Total
Estimated % uncollectible
The company records sales revenue net of the sales discount. If a customer pays after the discount period, the sales discount that is
forfeited is recorded in a separate account (sales discounts forfeited) and closed to sales revenue at the end of the accounting period.
Aging of Accounts Receivable
1-30 days
past due
$31,500
Current
$42,000
1%
2%
31-60 days
past due
$ 5,000
10%
Over 60 days
past due
$ 6,500
30%
Required:
1. Determine the balances of accounts receivable and allowance for doubtful accounts at December 31, 2023, based on the preceding
information. (Hint: use T-accounts to keep track of the effects of the transactions above on these accounts.)
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